Greeting from Chicago, where I (Anthroguy) am attending the CEO Conference with some colleagues and students from Fresno State.

What does anthropology have to do with the market “hit rate” for new innovations? Blogger and design anthropologist Eva G:dotter Jansson answers this question nicely in a recent blog posting. Jansson makes an extended argument for the value of design anthropology and ethnographic user experience research for increasing innovation hit rates in the marketplace. The secret to hitting? Know what users really want and need. The method for finding that out? Ethnographic research – research that takes you into firsthand, face-to-face contact with users in their natural habitat, where you can observe, interact and talk with them around and about the product or service area in question. From Huggies to Lexus, user experience research has delivered the results (see Jansson’s posting for details).

Jansson cites two main sources to back her anecdotal evidence. First, she touches briefly on Standish Group’s CHAOS Report, an annual report on IT project success and failure rates. The 2009 CHAOS Report recounts the worst project failure rate in a decade. More importantly, a consistent finding across CHAOS reports over a 14 year period is, in Jansson’s words, a “lack of deep understanding of the user’s context and expressed and hidden needs.” As Mitch Bishop said over the summer: “When are companies going to stop wasting billions of dollars on failed projects? The vast majority of this waste is completely avoidable; simply get the right business needs (requirements) understood early in the process.”

Why is it so hard to get the user’s needs right? In my own experience, and that of others in my field, managers often rely on marketing to tell designers of all types what the customer wants or needs — yet, ironically, marketing often don’t know customer needs very well. Or, to put it more subtly, they know a certain kind of something about customers: they know what customers say they want. However, since people often have difficulty articulating needs, this kind of verbal report is unreliable. At its worst, taking verbal reportage of customer needs straight to the design process results in feature-listing, over-loaded products, eventual customer and/or user dissatisfaction, more feature requests, etc. (And the difficulties multiply when the customer and end user are not the same.)

Ethnography aims for the a deeper understanding of user needs, at a more general and hence more basic level than the feature.

Which brings us to the Doblin Group, a leading innovation consultancy. Doblin founder Larry Keeley has been touting for years the value of design anthropology in increasing hit rates. Going back to 2005, he told Nussbaum On Design that “companies can increase their innovation effectiveness by 35% to 70% or 9 to 17 times the norm. The norm, of course is the incredibly low 4.5% ‘hit’ rate of successful innovation that companies generally have. Keeley said that ‘if you just use anthropologists, you can triple your innovation effectiveness by three times.’” Blogger Jansson cites Keeley’s figures approvingly. The hit rate boost from using design anthropology/ethnographic research makes perfect sense to me – after all, there is no other method that gets at user needs and desires any better. But, I’m still trying to track down the data on which Keeley bases his numbers. If I turn anything up, I’ll post more.

By the way, thanks to Tim Stearns and the Anthrogeek for encouraging me to blog about this. Actually, what happened was, the Anthrogeek and I were taping The Pulse radio show (dated 10/24/09) with Tim when Jansson’s blog came up and the Anthrogeek told the listeners to tune into TheAnthroGuys for more. So, here’s that “more” A-geek promised for you.